India services PMI surges to 59.3 in December on strong demand

New Delhi, Jan 6, 2025: India’s services sector witnessed robust growth in December 2024, achieving the fastest expansion in four months, fueled by strong demand and easing inflationary pressures, according to a private survey released on Monday. The S&P Global India Services Purchasing Managers’ Index (PMI), compiled by HSBC, surged to 59.3 in December, up from 58.4 in November. A PMI reading above 50 indicates expansion, while below 50 signifies contraction. As a key indicator of economic activity, the survey highlighted continued demand buoyancy in December 2024, which drove higher new business inflows, supported output growth, and encouraged firms to hire more workers. Service providers expressed confidence in sustained growth, with expectations of increased output over the next 12 months, the survey noted. Companies remain optimistic about the business outlook for 2025. “India’s services sector demonstrated remarkable resilience in December, with business activity growth hitting a four-month peak. Leading indicators like new business and future activity signal that this momentum is likely to persist in the near term. Additionally, easing input cost inflation has bolstered business confidence,” said Ines Lam, Economist at HSBC. Lam added that the robust performance of the services PMI contrasts with the signs of moderation in the manufacturing sector. The manufacturing PMI dropped to a 12-month low of 56.4 in December 2024, reflecting a slowdown in industrial activity. Although services firms continued to face rising business expenses in December, the pace of inflation eased from November’s 15-month high. Reports suggest firms incurred higher costs for food, labor, and materials.